The Turnberry Agreement Is Finally Moving Forward. Whether It Holds Is a Different Question.

Most procurement teams building transatlantic supply chain models have spent the past ten months operating under an agreement that was simultaneously in force and in limbo. This week, that changed, at least on paper.

European diplomats and MEPs reached agreement late on Tuesday to implement the Turnberry Agreement, the EU-US trade deal concluded last summer between Trump and European Commission President Ursula von der Leyen. The deal eliminates tariffs on most US industrial goods imported into Europe, while capping US tariffs on EU exports including cars, pharmaceuticals, and semiconductors at 15%. 

The path to ratification was not smooth. MEPs froze the deal after Trump threatened Greenland earlier this year, and suspended it again after the Supreme Court ruled that his earlier tariffs were illegal in February. The European Parliament had kept it frozen for several weeks before the Commission assured lawmakers that the US would honour its side of the agreement and cap tariffs at 15%.

Trump had given the EU a firm 4 July deadline to implement its side of the deal, warning that failure would result in "much higher" tariffs on EU exports beyond the 15% ceiling. The provisional agreement now moves toward formal adoption, which should follow within weeks.

What the deal actually commits both sides to

Under the Turnberry Agreement, the US applies a 15% tariff ceiling on most EU exports. In return, the EU eliminates tariffs on US industrial goods including machinery, chemicals, equipment, and raw materials, while granting preferential tariff-rate quotas for certain American agricultural products and seafood. The EU also committed to investing $600 billion across strategic sectors in the United States through 2028 and purchasing $750 billion worth of US energy.

The steel and aluminium dimension remains unresolved. US tariffs on EU steel and aluminium derivatives remain as high as 50%, despite the broader agreement establishing a 15% ceiling on most other EU goods. The European Commission secured the legal right to suspend tariff preferences granted to the United States if Washington continues applying duties above 15% on EU steel and aluminium derivatives beyond December 31, 2026. This mechanism functions as a structured deterrent but is not an automatic trigger.

Why fragility is the operative word

The deal remains fragile as long as Trump continues to use tariffs as a tool of political pressure. EU-US relations are strained by disagreements over Ukraine, NATO, the Iran war, and Germany's criticism of the US-Israel military action. Trump has repeatedly called on European countries to deploy ships to help secure the Strait of Hormuz, a move Europeans have been reluctant to make. 

The Turnberry Agreement has been criticised for being imbalanced: the United States gains access to the EU market with low or non-existent tariffs, while EU exports to the United States face tariffs of around 15%. However, the overall picture is broader. European companies also benefit from cheaper imported inputs and components, and the agreement should be assessed as part of value chains rather than purely from an export perspective.

If the agreement cannot be implemented, the risk of tariff escalation increases significantly. The positive parliamentary vote supports a more predictable operating environment and gives businesses better conditions to plan investments. That framing is the most honest description of what ratification actually delivers: not a resolution, but a reduction in the probability of something worse. 

The exposure for European and Asian companies

For any non-US manufacturer, logistics operator, or procurement team with exposure to transatlantic trade, the Turnberry ratification reduces one specific risk: the near-term escalation to tariffs well above 15%. It does not reduce the underlying political volatility, the unresolved steel and aluminium dispute, or the dependence of the entire framework on a US administration that has demonstrated it is willing to use trade policy as leverage on unrelated geopolitical issues.

Volkswagen, which imports over 270,000 vehicles annually to the US, reported a 20% decline in US sales in the final quarter of 2025 as it pre-emptively adjusted for tariff headwinds. Mercedes-Benz has been forced to revise its 2026 margin targets downward by 150 to 200 basis points, citing the 15% surcharge as a direct hit to its luxury SUV exports. The deal being ratified does not undo those numbers. It simply sets the floor that both sides have agreed not to go below, for now. 

The disruption does not arrive as a collapsed negotiation. It arrives as a permanent 15% cost built into every EU product crossing the Atlantic, with a political mechanism attached that could raise it further if the relationship deteriorates again.